In a "take that, Barnes and Noble" move, Amazon just dropped the price of the Kindle 2 from $259 to $189, making it ten bucks cheaper than the just price-reduced nook 3G. Amazon still doesn't have an answer to the new nook Wi-Fi model that sells for just $149. And so far there's no price drop for the 9.7" Kindle DX whose real competitor is likely the iPad more than any other e-ink ereader.

While the price of ebooks has risen thanks in part to Apple's iPad and the strengthening of the agency model for book pricing, it looks like the hardware prices are going to continue spiraling down. That's great because it gets the technology in more hands, but we do hope it doesn't stifle hardware innovation and new feature deployment.